Senate Harkin Report Documents Massive Fraud and Abuse in For-Profit College Industry

On July 30, 2012, the Senate Health, Education, Labor, and Pensions (HELP) Committee released the Harkin Report, a devastating two-year investigation documenting systematic fraud, abuse, and taxpayer exploitation in the for-profit college industry. The 2,000-page report, based on subpoenaed documents and testimony from 30 for-profit college companies enrolling over 1.1 million students, revealed an industry that spent more on marketing and profits than on educating students while driving a student debt crisis.

The investigation found that for-profit colleges on average spent 22.4% of revenue on marketing and recruiting, 19.4% on profit, and only 17.2% on instruction. CEOs of publicly traded for-profit colleges earned average compensation of $7.3 million. Meanwhile, 54% of students who enrolled in for-profit colleges between 2008-2009 had left without a degree or certificate by mid-2010—a dropout rate far exceeding traditional colleges.

The report documented predatory recruiting practices targeting vulnerable populations: veterans (whose GI Bill benefits were exempt from the 90-10 rule), single mothers, first-generation college students, and low-income minorities. Internal company documents showed recruiters were trained to identify and exploit “pain points”—financial difficulties, personal traumas, and insecurities—to pressure enrollment. One company’s training materials instructed recruiters to find prospective students’ “wound” and “open that wound.”

Students enrolled in for-profit colleges represented only 10% of all college students but accounted for 44% of all federal student loan defaults. The report found that for-profit students carried average debt of $32,653 compared to $20,000 at public universities, despite often receiving worthless credentials that employers did not recognize. Many for-profit graduates reported being worse off than before enrollment, with crushing debt and no improved job prospects.

The investigation also exposed regulatory capture. Industry lobbyists had successfully weakened Department of Education oversight, and the revolving door between for-profit companies and education regulators undermined enforcement. The report recommended stronger gainful employment rules, better disclosure requirements, and stricter enforcement—recommendations the Obama administration partially implemented but which were systematically dismantled when Betsy DeVos became Education Secretary in 2017. The Harkin Report documented one of the largest transfers of public wealth to private profit in American history: over $30 billion annually in federal funds flowing to an industry that left millions of students with debt and broken promises.